How San Diego Loses So Much Money on Qualcomm Stadium

It’s the most common rallying cry against a new Chargers stadium: San Diego taxpayers shouldn’t subsidize a football team.

And yet, they already do. Last year, the city spent a whopping $12 million to operate the Chargers’ current home at Qualcomm Stadium. It’s a tale of shoddy contract negotiations, lawsuits and the city’s inability to attract many high-paying events to the stadium other than the Chargers.

This is how it all happens. Let’s start with the Chargers.

[1]File photo by Sam Hodgson

The team is supposed to pay the city[2] $3 million a year in rent. But the team’s lease with the city allows it to count parking revenues, a percentage of beer, popcorn and other concessions and the city’s suite at Qualcomm all against its rent. Factor in a settlement to a lawsuit over disabled access at the stadium, which requires the city to pay the team roughly $1.3 million a year, and the city actually owes the Chargers money at the end of every season. Last year, the city ended up paying the Chargers $800,000.

The city doesn’t do much better with its other tenants.

[3]Images via Shutterstock and Ernie Anderson/SDSU Media Relations

San Diego State University plays football at Qualcomm. Two college football bowl games are there every year. Besides football, monster truck shows, soccer games and swap meets take residence in the stadium and its massive parking lot.

None of those is a cash cow, either.

SDSU, for instance, pays no rent to the city. The school only pays expenses for hosting games. The city does get a $1 per ticket fee from Aztecs games. The city makes roughly $100,000 a year from the Aztecs.

SDSU’s lease with the city, last updated in 2008, came at a low point for the team, said stadium manager Mike McSweeney. The city gave the school a break.

“It was designed to let SDSU ‘get healthy’ as the football program improved,” McSweeney said[4].

Besides the two football teams, other major events, such as the bowl games and soccer games featuring the U.S. or Mexican national teams, only happen a few times a year at most. There’s no way the city can recoup its personnel, security, janitorial and other expenses at the stadium, McSweeney said.

“In order to bridge that gap, we’d have to have the Mexican national team here every week of the year, and that still wouldn’t be enough,” McSweeney said.

All together the city made $3.1 million off its non-Chargers and Aztecs events at Qualcomm last year. Personnel costs alone last year were $3.4 million, so the city doesn’t even make enough off events to pay the people who work there every day.

There’s more bad news.

[5]Images via Shutterstock

Police officers and firefighters patrol Qualcomm during Chargers game days. The city picks up most of the tab, which is funded out of separate accounts than the stadium budget.

Last year, city taxpayers paid $1.1 million in public safety costs at Qualcomm.

There’s also the bill from the last time the city tried to fix the stadium.

[6]Photo by Dustin Michelson

In 1997, the city borrowed $68 million to renovate Qualcomm and build the Chargers a new practice facility. (The electronics giant Qualcomm kicked in an additional $18 million, hence the name of the stadium.) Taxpayers are still paying for their share. Last year, the debt was almost $4.8 million, an amount due until the loan is finally paid off a decade from now. This money has to be paid regardless of whether a new stadium is built.

[7]Photo by Dustin Michelson

Qualcomm is almost 50 years old. Things are outdated and broken. The most recent estimate put the backlog of needed fixes at almost $80 million. The city’s not making big changes at the stadium. But it does budget $750,000 annually to make repairs. That adds to the total bill.

So let’s do the math for the city’s spending on the stadium in 2014:

• $10.2 million to subsidize the stadium’s balance sheet because the Chargers and other events don’t provide enough revenue (this includes the $4.8 million needed for the loan for the last Qualcomm renovation almost 20 years ago)

• $1.1 million for police and fire services at Chargers games

• $750,000 for repairs

Combined, the city lost $12 million on Qualcomm Stadium last year.

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